LAS VEGAS, Sept. 26 (Reuters) - Early this month, Nevada
Secretary of State Ross Miller's office shut down a Las Vegas
registered agent called Power Point Management and revoked the
corporate status of its 427 active clients.

It was an example of how his office will "aggressively
enforce our statutes and regulations," Miller said, warning that
his state's 'business friendly' ethos "should not be interpreted
to mean 'haven for bad actors.'"

Power Point is part of Nevada's booming industry of business
incorporators and registered agents, more than 700 firms in all,
whose key service is to receive on behalf of the companies
they've registered any notices of litigation, tax documents and
other records required by the state. Like most, it's a small
operation. It has offices at the end of a winding interior
hallway in a faded, stucco, two-story office park on Las Vegas'
Flamingo Road. The building's rental manager, Laba Singh, says
the firm sends in its "$200-something" rent check by mail each
month, but he has never seen the tenant.

The issue that got Power Point in trouble seems minor: It
claimed that it, and every one of its clients, was a home-based
business making under $27,000 a year. Such businesses don't have
to pay Nevada's $200 annual licensing fee. If all 427 of Power
Point's clients falsely claimed the $200 exemption, then Nevada
lost out annually on $85,400 in total.

An analysis by Miller's office, however, points to a bigger
problem. The number of such business exemptions claimed each
quarter has nearly tripled since 2009. Miller has sent letters
to 60,000 businesses claiming the exemption, one in five state
registrants, asking for proof they fit the home office
exemption. Any that fail to comply will lose their corporate
status, he says. In the office's investigation of a limited
number of these businesses, there was not one instance of a
proper claim.

An audit by the Nevada Executive Branch predicted the state
will lose nearly $11 million due to a sharp increase in
companies falsely claiming to be exempt from licensing fees.

"We realized either we had a lot of businesses ripping the
state off, or we had out-of-state companies not doing legitimate
business in Nevada," Miller told Reuters in a telephone
interview from his office in Carson City.

Miller's office discovered that few of Power Point's clients
have any clear connection to Nevada. Most seem to be based in
Taiwan, some with mainland Chinese operations.

Power Point executives reached in Taipei declined comment.
The firm's website highlights Nevada as one of several offshore
locations offering "tax benefits, limited liability, profit
deferral without deadline and the possibility of an IPO." But
people with knowledge of the situation said Power Point's
clients had been interested in setting up Nevada businesses as a
stepping stone to building their brands in the U.S.. That proved
difficult, these people said. Attempts by Reuters to contact
many clients directly were unsuccessful.

Miller says the state is getting tough, but Power Point is
just one of 700-plus registered agents operating in the state,
and he wants to act before federal legislation proposed in
August by Senator Carl Levin of Michigan, or other "burdensome"
federal attempts to weed out bad actors, gets momentum. "It's
clear that we have to clean up our own house before Congress
tries to do it for us," Miller says.
(Nanette Byrnes reported from Chapel Hill; Cynthia Johnston
reported from Las Vegas; editing by Claudia Parsons and Michael
Williams)